AVG Technologies to launch IPO in New York

Security software company AVG Technologies will launch an initial public offering (IPO) of shares on the New York Stock Exchange, and may pave the way for other Czech tech companies to float their own shares on the other side of the Atlantic.

AVG announced the filing Jan. 13 of an application with the Securities and Exchange Commission to offer shares on the exchange, though the number of shares and price range has not yet been disclosed. Representatives of the company, which is registered in the Netherlands, say they will use net proceeds from the offering for general corporate purposes, which may include future acquisitions.

Morgan Stanley & Co., J.P. Morgan Securities and Goldman, Sachs & Co. will manage the offering, which AVG hopes will raise $125 million (98.6 million euros).

In March 2011, AVG borrowed $235 million from a consortium led by J.P. Morgan and Morgan Stanley, saying the money would be used to pay dividends to shareholders. The company had sought the loan just one month after AVG's then-leading shareholder Enterprise Investors announced the decision to scrap plans to launch an IPO on the Warsaw Stock Exchange that was expected to raise 800 million euros.

Analysts say AVG's timing is right for an IPO because of the good mood IT investors have been in recently despite the volatility of other sectors seen as the European debt crisis deepens.

"Although the sector of computer security is not a fashion wave in recent years, it's a stable and well-established sector of information technology business, with a lot of opportunities for the future," said Ondřej Moravanský, a tech analyst with Cyrrus.

By most estimates, it may have also been a good step to back away from the launch in Warsaw two years ago, as the uncertain outlook for the European economy continues to send tremors through markets.

"On the one hand, the European debt crisis is pressuring investor sentiment, but on the other hand, the growth of the U.S. economy is slowly continuing," Moravanský said. "The American stock market is a logical choice, since AVG is a company known worldwide, and its listing in Warsaw or Prague could only have attracted fewer investors than in the U.S markets."

The current ownership structure of AVG consists of Prague-based investment firm Benson Oak with a 35 percent stake; Intel Capital, the investment branch of the U.S. hardware producer; Warsaw-based Enterprise Investors, who jointly hold a 34 percent stake; and U.S. investment firm TA Associates with a 25 percent stake.

Czech anti-virus software company Avast squeezed in its request for an IPO on the New York Stock Exchange just ahead of AVG at the end of 2011. Avast hopes to raise $200 million from the sale.

Emily Thompson can be reached at
ethompson@praguepost.com